Cash Out Refinance Closed for Client Purchasing Golf Course in Georgia
On August 16, 2021, our client closed on a cash out refinance of a recently purchased golf course located in Georgia with a size of 190.04 total property acres. Funds from the cash out refinance were used to purchase maintenance equipment needed for the course and provide working capital. Our client plans to seek permanent financing with a local bank once one year of ownership has been obtained. The property is valued at $2,498,339.00 and the full loan amount for this deal was $840,000.00 with an LTV of 34% and a LTC of 56%.
Commercial Capital BIDCO Closes a Cash-Out Refinance in 3 Days for New Client
Commercial Capital BIDCO Closes a Cash-Out Refinance in 3 Days for New Client
In November of 2021, we closed on a cash-out refinance of a single-family residency in Greensboro, Georgia. The long-term rental home is a lake property and that area is a very popular vacation site for people in that region. The rental is a 5-bedroom, 4.5 bath property with sweeping views of the lake.
This loan was closed in just 3 days and was conducted for a new client of ours here at Commercial Capital BIDCO. This particular client needed to close in three days due to another lender dropping the ball on the deal last minute. Reports and other documents were ready once we took over the deal and this allowed us to quickly complete the transaction and get the client the funding they needed when they needed it.
The loan term for this deal is 6 months and we have first lien position on the property. The requested amount was $1,695,000 and the appraisal value of the property as of October 21, 2021 was $2,600,000. This property is 65% LTV.
The client will now be using the home as a rental property that at the time of closing had an executed 12-month lease agreement. The cash-out received by the client was used as a down payment on a separate investment property.
Why Invest in Commercial Properties in 2022
Commercial Real Estate has shown significant growth in 2021 over what will forever be known as a year of uncertainty in 2020. What was once considered a shuttering market just over a year ago, multi-family residential is full steam ahead while industrial and office space properties are also ticking upwards. With so many changes over the last 18 months, you may be asking yourself, “Why invest in a commercial property?” Our question for you is, “WHY NOT?”
According to the "May 2021 RCA CPPI: U.S." summary report, U.S. commercial real estate prices rose at a 1.3% annual rate from April 2020 to 2021. Driving that increase were apartments (up 7.6% year over year) and industrial properties (up 9.4%), the retail sector (up 1.3%), and office buildings (up 3%). – Millionacres.com
Commercial and Office Spaces:
From the rise of unique office spaces, the opening of satellite offices in suburbia as well as the reopening of corporate headquarters, offices are seeing a resurgence and where they’re popping up is a surprise to many.
With many companies now embracing a strong sense of employee culture that includes comfortable yet trendy surroundings, loft offices are some of the more popular choices across several industries – turning what were once retail-only spaces into multi-use spaces. Now these property types are an appealing investment choice for many who are looking for a diverse portfolio with more limited means.
Suburban office space and smaller square feet options for satellite offices are also excellent investment opportunities for those looking to invest in a property outside of a metro locale. This also allows the property owner to work with an experienced tenant who has other offices established in other locations. These general use spaces are also easily flipped allowing a new tenant to take over quickly and easily.
While not increasing as quickly or as steadily as residential, office space will continue to tick upward as employers finalize their reopening plans and prepare for most employees to transition back into offices full time over the next year.
Retail Brick-and-Mortar:
Retail will continue to evolve and find its pace over the next 12 months. One of the most hard-hit markets due to the pandemic, retail owners saw a surge in online sales, however, an increase in sales also occurred via curbside orders. This particular piece to the sales pie increased alongside a retail company’s increase in direct social media posts – allowing buyers to “shop a store’s social media,” purchase their products locally while also being able to receive their products same-day.
With this, we will see locally owned retail opting to keep their brick-and-mortar store fronts, but possibly look to increase their product storage and reconfigure their backstock needs as curbside orders continue and online orders increase.
“Same Day Pick-Up!” “Curbside!” These are phrases that have been promoted to buyers since the start of the pandemic – even across larger brands and corporations – allowing buyers to enjoy a slightly altered shopping experience while also receiving goods same-day as opposed to shipping and possible delays.
Strip malls and larger retail developments have also adjusted their selling strategy by implementing these additional forms for buyers to receive their purchases – not just locally owned mom and pop stores. While not an ideal situation in an uncertain world, these adjustments helped to keep the doors open for retail – small and large – assuring investors that these particular sectors of commercial real estate were still very active and growing.
Multi-Family Residential:
The start of the pandemic saw college students, new graduates, young families and more moving back home with their parents or to other shared living situations with friends and family. The uncertainty of the economy produced a boom of residential real estate listings, however with states now opening back up, markets are seeing a resurgence of individuals and families needing temporary and/or more budget-savvy living options such as apartment and condo rentals. Multi-family commercial real estate has witnessed the greatest increase of growth and will continue to do so as more states, universities and places of employment begin to open back up to pre-pandemic standards.
What to Do Now
Always weigh the pros and cons to any investment situation as well as play out each scenario – especially if you are a first time commercial real estate investor – however, striking while the iron is hot will be key to maximizing your investment and cash flow early on. With unique opportunities on the rise across all branches of commercial real estate, investors will be able to build a path that suits their goals. Lending experts – such as our team at Commercial Capital BIDCO – can assist you with the funding you need that the banks simply cannot do. We are proud of our in-house credit team as well as our in-house credit committee that both allow us to process loans quickly and easily. What are you waiting for? We’re ready to talk investment goals when you are!
NACLB 2021: The Industry is Back!
NACLB 2021: The Industry is Back!
We rolled the dice on attending NACLB 2021 this year in Las Vegas and came out on top with a refreshed view of the industry and what we’re looking forward to in 2022! NACLB – the National Alliance of Commercial Loan Brokers – is one of the most revered organizations in the industry and their annual conference is always a gold mine of information and networking for seasoned and rookie brokers alike as well as banks and lenders.
After canceling the 2020 conference and going virtual like most all in-person events that year, it was a breath of fresh air to be back with like-minded brokers and peers again. While the time at our booth is always considered the most beneficial while at conference, we did enjoy the breakout sessions and the wide array of content each of those provided. The breakout sessions took on a new spin for this year with less “presentations” and more round-table style panel discussions across different topics. Topics spanned anywhere from Networking 101 to The Art of Closing the Deal (both sessions led by our very own Terry Luker) to Equipment Financing and Finding Your Niche.
We have always been firm believers in that Commercial Capital BIDCO is a unique lender as we are one of the few licensed bridge lenders that lend in the small balance space - $250k to $2MM. We’re also very fast and flexible – funding a fully underwritten loan in as little as 5 days. With our own in-house credit team and credit committee, we are able to offer our clients an experience that is far from cookie cutter…and we most certainly felt that this has held true at this year’s conference with our launch of The Commercial Broker Playbook – an eLearning platform for brokers of all experience levels. Keeping commercial lending brokers ahead of the game is where we want to be in 2022.
Looking back on 2021 and forward into 2022, we know one thing is for sure and that is that we are proud to be a part of industry that knows no bounds and doesn’t give up. We enjoyed hearing stories of perseverance and growth from other brokers across the country while at conference and cannot wait to see the creative thinking that will drive not only our team here at Commercial Capital BIDCO but with other brokers and lenders throughout the United States.
Thank you to NACLB for bringing the conference back in 2021! We cannot wait to be back at Caesar’s Palace in 2022.
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Want to learn more about our new e-learning platform The Commercial Broker Playbook and how it can up your game plan? Visit TheCommercialBrokerPlaybook.com today.
Terry Luker featured in Deal Maker Magazine
Luker Masters ‘Three-Headed Monster’ of Diversification at ACS.
Industry Icon Terry Luker shares the secret to his success with ACS — Alternative Capital Solutions: find your niche, form strong partnerships and fill voids in the market. By taking a three-pronged approach, Luker strengthens his community bank relationships and ensures every deal that comes across his desk finds its home.
Terry Luker had been in the automotive industry for 21 years and was looking for a change. “I was a fixer. I’d go into broken stores and fix them,” he says. “And then about three years in, the owner would want to change pay plans… that’s when I would normally leave. The last time we did that, I decided that I was going to go do something different.”
ACS — Alternative Capital Solutions Is Born
A friend told Luker about shadow banking and a company called Commercial Capital Training Group. Luker recalls the conversation he had with his friend: “He said, ‘Terry, you’re an unbelievable deal maker. This is what you ought to do for a living.’” Soon, Luker met the Commercial Capital Training Group team and enrolled in the program.
During his training at CCTG, Luker learned how important it is to find your niche if you want to be successful. When he launched Alternative Capital Solutions seven years ago, he was determined to find a specialty that would set the company apart for the long haul.
Read more here ... https://www.dealmaker-magazine.com
Fabrication company restructuring post-bankruptcy
Loan amount - $550K
Collateral: real estate and rolling stock
This loan was to a 30-year-old company with 15 employees and allowed the company to purchase their rolling stock and real estate out of bankruptcy in order to keep the business going. The owners of the company had a long history of success, but an unforeseen issue disrupted their business. We were able to provide the capital to re-launch what had been a very successful endeavor.
Build-out and working capital for Cannabis company
Loan amount - $1,500,000
Collateral: real estate and equipment
This loan provided the buildout and working capital needed to launch a medical and recreational cannabis facility in Michigan. The borrowers are very experienced, so we were able to cash-out their existing assets to provide the capital needed to launch the new location.
Build-out and working capital for start-up cabinet manufacturer
Loan amount - $2,300,000
Collateral: real estate
This loan provided build-out and working capital funds to a start-up cabinet manufacturer in middle Tennessee. The borrower previously paid cash for the real estate and equipment and also had other paid off real estate investments. We were able to cross-collateralize the loan to provide the needed capital to get the company off the ground and provide 15 jobs in a local community.